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Strong dollar will deal death to US firms' overseas growth

2015 will be 'pretty awful', according to analyst firm Forrester

2015 is shaping up to be “pretty awful” for US tech vendors, which have been hit by a one-two of strong international competition and a strong US dollar.

That’s according to Forrester, which reckons global tech purchases in local currencies will grow by 3.6 per cent this year – down from the 5.3 per cent growth forecast in January.

The biggest decline, though, will hit sales of products measured in the US dollar. Forrester now no longer anticipates any growth, instead predicting a decline of 3.1 per cent, a reversal on the gain of 4.1 per cent which was forecast in January.

This will be a problem for US tech firms with big overseas revenues.

The analyst expects a return to growth next year, at a rate of 4.4 per cent, saying it thinks the weakening of the euro and other currencies against the dollar is temporary.

Tech vendors with interests in software and services have the most reason to be optimistic.

Software and services are the fastest and largest-growing categories, growing thanks to what Forrester called “continued focus on business technology”.

Software will account for $579bn, with applications the largest single sub-category at $285.2bn, Forrester said.

Computer equipment is the smallest overall category at $361bn, with PCs the largest single segment with $147.2bn, followed by servers on $81.8bn then storage on $56.6bn. Tablets will weigh in on $17.5bn, the analyst reckoned. ®